The Founder’s Economic Theory

by Dick McDonald

5/7/09: The NY Times gave me pause yesterday. In a tribute to Jack Kemp’s civil rights advocacy the writer couldn’t resist taking a swipe at Jack’s being the God Father of latter-day fiscal conservatives opining he promoted “that wishful Republican voodoo known as supply-side economics.”

After I thought about it I realized that I seriously dislike both supply-side and demand-side economics as presently defined. Both are really academic voodoo.

Demand-side economics prescribes government intervention that takes capital away from citizens through oppressive taxation and regulation claiming that such confiscation and redistribution delivers the “common good.” Supply-side economics is lazzie faire capitalism that has as its foundation lower marginal income tax rates for the job creators that generates wealth when invested lifts all boats which enables benefits that trickle down on the less fortunate.

Any 3rd grader knows that the Democrats and their support of demand-side intervention by big government is a prescription for continued poverty and mediocrity. It has been for 75 years. He also knows that Republicans have little interest in improving the lot of the poor and middle-class and that supply-side economics has led to massive income disparity and class warfare.

So what should a society do? What economic theory holds water for the 21st Century?

How about reinstating the Founder’s economics – a tiny central government and no taxes on income and wealth? Add to that the concept that all men are created equal and none of them should be discriminated against by their government. That throws supply-side and demand-side economics under the bus. Both theories discriminate. They discriminate by excluding the poor and most of the middle-class from ever achieving the American Dream of financial independence.

The truth of what I suggest is being played out in the minds of most thinking Americans for the last three months. The tea parties are nothing more than a cry from the people for politicians to stop the demand-side insanity of massive government spending and its fiscal irresponsibility and a desperate plea to the supply-siders that they have to come up with ideas how to make the poor and middle-class prosperous just like they have for the rich – they have to alleviate their being squeezed between oppressive taxation and inflation.

Here is an idea – on how to employ the original economic theory of our Founders.

The Founder’s economic theory suggests two steps to achieving the American Dream for average Americans. First the elimination of the method of funding entitlements and its eventual replacement which enables the people to keep ownership control of their payroll taxes and have those taxes invested in the economy to grow into nest eggs that insure they have an affluent retirement and funds left over to fund a better life for their family. Basically make everyone a capitalist, not just half the population.

Secondly, after the obligation to fund entitlements is returned to the people, the government funding of entitlements will dramatically shrink as will the size of the Federal government. With a reduced size of the Federal government the people could afford to replace “income taxes” with a small consumption tax to cover national necessities.

The Founder’s Theory of Economics could then be realized – a small central government and no taxes on income and wealth and an enormous store of capital owned by every American in what we could call Personal Pension Accounts.

Anyone interested in the Founder’s Theory of Economics should see www.riseupamerica.us. Therein lays a blueprint for the people to rise up and retake their country. We don’t need no stinking demand-side or supply-side economics. The Founders got it right in the first place.